VENICE (AFP) – As health systems brace for damage from the rapidly spreading variant of Delta Covid-19, Group of 20 (G-20) finance ministers warned on Saturday July 10 that it could also slow down the global economic recovery.
“The recovery is characterized by large divergences between and within countries”, and “remains exposed to downside risks, in particular the spread of new variants of the Covid-19 virus,” they said in a final statement .
The ministers also warned of the dangers of “different rates of vaccination” around the world.
The main concern is the Delta variant, which first appeared in India and is spreading rapidly, causing epidemics in Asia and Africa, and increasing the number of cases in Europe and the United States.
“We have very good economic forecasts for all the G-20 countries,” said French Minister of the Economy Bruno Le Maire.
But he warned: âThe only thing that could threaten a strong and rapid rebound in the economy is the variant and a new wave of the pandemic.
“We need to improve immunization, all over the world.”
Britain’s Rishi Sunak was more defiant, telling AFP in an interview that Britain had shown that “vaccines are effective in preventing hospitalizations and deaths, even with the Delta variant”.
“I think this gives us the confidence to move forward and slowly and safely reopen our economies and our countries,” he said.
“Support always needed”
However, many countries, from Spain to Thailand, have decided to reintroduce anti-Covid restrictions.
All eyes in France will be on President Emmanuel Macron’s speech on Monday, when he presents next steps as the number of cases increases, while Argentina extended its own measures until early August.
Growing concern over the Delta variant follows the easing of restrictions in many countries, which has brought long-awaited fresh air to many major economies.
The G-20 called for accelerating immunization campaigns around the world, pledging to do more to help developing countries give their citizens injections.
While 70 percent of the population is vaccinated in some developed countries, the figure is less than 1 percent for low-income countries, according to UN Secretary-General Antonio Guterres.
Equity markets were also scared this week, as a report from the last US central bank meeting showed that a debate on tightening monetary support is ongoing, despite the current health crisis.
In addition, there are signs that the recovery in China is slowing down.
However, the forecasts of large institutions are optimistic.
The European Commission this week raised its growth forecast for Europe for 2021, saying it now expects an increase of 4.8%, down from 4.3% previously.
Brussels is counting on the continued lifting of restrictions to stimulate growth and vaccination programs to limit the impact that another wave of coronavirus could have on the economy.
The International Monetary Fund was also optimistic, saying it expects “fastest” growth in the United States in 25 years.
The G-20 finance ministers, however, issued a more cautious note on Saturday, pledging to “continue to support the recovery, avoiding any premature withdrawal of support measures”.